Establishing an Emergency Fund is crucial. No one is immune to financial surprises. Many people postpone saving for a rainy day using the excuse that they don’t have any money left over after paying bills.

 While you may believe there is no way you can save money, you will be surprised when you start forcing yourself to think differently about your spending habits. Set a goal that elevates your Emergency fund to top priority status. Business Insider defines an emergency fund as a minimum of three to six months of living expenses.

 Why You Need an Emergency Fund

 As obvious as the answer to this question may seem to many, there are a significant number of people who don’t make saving money a priority. Bankrate reports that 28% of Americans have no emergency savings. 

By definition, emergency funds are needed for all the unexpected financial surprises that are all-too-common. An emergency fund will provide peace of mind so when your car needs to be repaired or you end up in the emergency room and your insurance doesn’t pay for 100% of the costs, then you can stay calm and feel happy about not having to charge up your credit card.

 How to Find the Money to Build an Emergency Fund on a Tight Budget

 1. Reassess your budget to find ways to save money.

 The first step you’ll need to take is to reassess your budget to see how you can save extra money. CNBC recommends reducing debt first before you start building your emergency fund. Amazingly, if you try hard enough, you will find ways to save even if you feel like you have nothing left after paying bills. Go shopping for cheaper insurance, a better cell phone deal and cheaper groceries.

 2. Save your tax refund.

 Kiplinger suggests that you save your tax refund. That is an excellent way to stash some fast cash. Be sure to immediately deposit it for safegkeeping so you won’t be tempted to spend a little bit of it. Establishing an emergency fund is all about self-discipline.

 3. Revise your W-4 so that you keep more of your earnings.

 You can also revise your W-4 form for extra money in your paycheck so that you won’t have to wait for your refund to get your hands on that money. It is important to remember that Uncle Sam is not paying you interest for keeping your hard-earned money.

4. Start a side hustle or a part-time job to immediately increase your earnings.

 A side business or part-time job is an excellent way to make some much-needed extra income that can be used to build your emergency fund quickly. It can also provide you with options for the future which is always a good idea. Putting all of your eggs in one basket is a risky business for anyone.

 5. Stop using credit cards unless you can pay off the balance monthly.

The last thing you need to do is to pay interest on expenses. Granted, there are some sweet rewards for using certain credit cards, so take advantage of them as long as you can pay the bill off each month without incurring interest charges.

 6. Pay yourself first, before paying all other bills.

 A great strategy for making this work is to have automatic deductions from your paycheck that immediately deposits money into your emergency savings fund. This takes away the temptation to negotiate with yourself over each deposit. Self-discipline is no longer a requirement.

 Where Should You Keep your Emergency Fund

 There are some hard, fast rules to follow when it is time to decide where to keep your emergency fund. First, you must be able to get to your money fast since it is for emergencies. But, you don’t want to keep it in a shoe box. That’s a bit too accessible.

 Bankrate suggests an online savings account or money market account. Another option is to invest in short-term CDs. Identify an account that pays the highest yield possible and that also meets the two criteria set above.

 The Takeaway

 Life is full of surprises. Some of them are wonderful, while others can put a strain on your financial well-being. An emergency fund is essential for achieving a happy and healthy life.

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